nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒03‒10
seven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Exploring the Spatial Economy by Night By Bergs, Rolf
  2. Trade Costs and Income in European Regions By Christoph Hammer; Aurélien Fichet de Clairfontaine
  3. The nature and impacts of environmental spillovers on housing prices: A spatial hedonic analysis By Masha Maslianskaia-Pautrel; Catherine Baumont pba148
  4. Does Techological Progress Affect the Location of Economic Activity? By Tabuchi, T.; Thisse, J.-F.; Zhu, X.
  5. Interaction matrix selection in spatial econometrics with an application to growth theory By Nicolas Debarsy; Cem Ertur
  6. Regional inequality and convergence in southern Europe. Evidence from Height in Italy and Spain, 1850-2000. By José Miguel Martínez-Carrión y Ramón María-Dolores; Ramón María-Dolores
  7. Potencial de mercado y desigualdad salarial, evidencia para México By Cardoso-Vargas, Carlos

  1. By: Bergs, Rolf
    Abstract: Nocturnal satellite images may offer an interesting tool to generate socio-economically relevant data and to analyse the evolution of space, e.g. cities or rural areas, and how spatial units interact over time. So far, the major purpose of using night satellite images for economic analysis has been the search for proxies for production and population density in countries with insufficient and unreliable data infrastructure. This essentially applies to less developed countries where weak data infrastructure is often part of overall underdeveloped administrative capacities. Error variance of light emission is constant over space and independent from error in official statistics. In industrialised countries official socio-economic data are deemed sufficiently reliable, a reason why night satellite analysis has been more of relevance for developing countries. However, this only holds for purposes to derive proxies for production or population data. In fact, there is also reason to use this tool in the observation of (spatial) economic patterns and trends in the more industrialised countries. Observation of spatial distribution of rural areas, urban agglomerations, border areas or other spatial categories are to be mentioned. More importantly, underlying patterns of spatial heterogeneity, such as Zipf’s law, and spatial dependence (change of spatial autocorrelation over time) can be made visible - without distortion implied by (changing) administrative boundaries. The images analysed in this paper are satellite images of the National Oceanic and Atmospheric Administration (NOAA). The time series of nocturnal satellite imagery and the application of adequate image analysis software, such as ImageJ (in some cases to be complemented by further statistics software), provide a useful perspective for the analysis of spatial change. This paper is an essay with preliminary ideas for discussion; the approach is explorative-methodological rather than one putting an empirical focus on a defined research item.
    Keywords: nocturnal satellite images, image analysis, spatial heterogeneity, spatial dependence
    JEL: R12
    Date: 2016–02–13
  2. By: Christoph Hammer (Department of Economics, Vienna University of Economics and Business); Aurélien Fichet de Clairfontaine (Department of Economics, Vienna University of Economics and Business)
    Abstract: Using a New Economic Geography (NEG) model, this study estimates the relationship between regional per capita income levels and the proximity of regions to large markets. Market access cannot be observed directly, so it has to be constructed. We follow a two-step-procedure of Redding and Venables (2004) and use results of a spatially-filtered gravity model to infer market access. To this end, we make use of a new dataset of constructed bi-regional trade flows between (and within) 240 European NUTS-2 regions (from 25 European countries excluding Bulgaria, Croatia and Romania) for the year 2010 (Thissen et al. 2014, IPTS). In a second step we test the hypothesis that access to large markets increases factor incomes. We find robust evidence that supports this hypothesis on a regional level. Controlling for a variety of factors that drive income differences, our findings highlight the robustness of the role of market access in explaining the uneven spatial distribution of income.
    Keywords: Wage equation, Gravity, European regions, New Economic Geography
    JEL: F12 F14
    Date: 2016–02
  3. By: Masha Maslianskaia-Pautrel (GRANEM, University of Angers); Catherine Baumont pba148 (Laboratoire d’Economie de Dijon (LEDi), University of Bourgogne Franche-Comté, CNRS UMR 6307, U1200 INSERM)
    Abstract: This paper investigates the spatial dimension of the environmental effects. We use recent advances in spatial econometrics to show that hedonic equations produce estimates to be differently interpreted as implicit prices according to spatial models. In particularly, the implicit price of housing attribute combines a feedback effect and a propagation effect and may be interpreted in terms of local or global spillovers. We drive an empirical study in the estuary of the Loire, a rural and urban area well occupied by various natural areas and more artificialized ones. We study various spatial interaction patterns to test the robustness of our estimates and we find that spatial dependencies based on inverse distance and small neighborhoods provide stable estimations. It is consistent too with realistic spatial interaction patterns for household behaviors: information on closer housings is more reliable and comparison areas are in fact limited by the research process. As expected, positive impacts are concentrated on traditional attributes like the proximity to the ocean frontage and quiet places. On the contrary, the presence of various natural wet amenities is negatively valued because of the impression of housing density associated to flood risk. If urban places are more valued by households, it's rather because rural location are less desired than because of urban intrinsic attributes.
    Keywords: Environmental valuation, Direct and indirect effects, Spatial hedonic models, Spatial weight matrix, Spillovers
    JEL: Q51 C21 C18
    Date: 2016–02
  4. By: Tabuchi, T. (University of Tokyo); Thisse, J.-F. (Université catholique de Louvain, CORE, Belgium); Zhu, X. (Zhejiang University)
    Abstract: We show that how technological innovations and migration costs interact to shape the space-economy. Regardless of the level of transport costs, rising labor productivity fosters the agglomeration of activities, whereas falling transport costs do not affect the location of activities. When labor is heterogeneous, the number of workers residing in the more productive region increases by decreasing order of productive efficiency when labor productivity rises. This process affects in opposite directions the welfare of those who have a lower productivity.
    Date: 2015–01–14
  5. By: Nicolas Debarsy (Laboratoire d'Economie d'Orléans - LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique); Cem Ertur (Econométrie - LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The interaction matrix, or spatial weight matrix, is the fundamental tool to model cross-sectional interdependence between observations in spatial econometric models. However, it is most of the time not derived from theory, as it should be ideally, but chosen on an ad hoc basis. In this paper, we propose a modified version of the J test to formally select the interaction matrix. Our methodology is based on the application of the robust against unknown heteroskedasticity GMM estimation method, developed by Lin & Lee (2010). We then implement the testing procedure developed by Hagemann (2012) to overcome the decision problem inherent to non-nested models tests. An application is presented for the Schumpeterian growth model with worldwide interactions (Ertur & Koch 2011) using three different types of interaction matrix: genetic distance, linguistic distance and bilateral trade flows and we find that the interaction matrix based on trade flows is the most adequate. Furthermore, we propose a network based innovative representation of spatial econometric results.
    Keywords: Bootstrap,GMM,Interaction matrix,J tests,Non-nested models,Heteroscedasticity,Spatial autoregressive models
    Date: 2016–02–24
  6. By: José Miguel Martínez-Carrión y Ramón María-Dolores (Universidad de Murcia); Ramón María-Dolores (Universidad de Murcia)
    Abstract: This paper analyzes the growth of height and its regional variability in Spain and Italy, among the generational cohorts of 1850 and 1980. Using male height data drawn from the military enlistment records of the period between 1870 and 2000, this paper explores inequality and regional convergence in the two countries. This long period was characterised by economic growth and the expansion of human welfare. Regional inequality and convergence are analysed using sigma and beta convergence, a methodology based on panel data to obtain the speed of convergence. The results show that in 1850 in both countries the height measurements started at low levels, but the two countries recorded a significant increase in the average height over the long term, which became more intense in Italy as from the beginning of the twentieth century, and in Spain from 1950. Therefore, there was divergence in the first half of the century and strong convergence at the end of the century. The regional inequality was more significant in the Italian case. Processes of regional convergence can be observed in both countries during the second half of the twentieth century, but at the end of the period, inequality was lower in Spain than in Italy.
    Keywords: height, biological welfare, Spain, Italy, economic development, regional inequality, convergence.
    JEL: I14 N33 N94 R13
    Date: 2016–02
  7. By: Cardoso-Vargas, Carlos
    Abstract: This paper examines the relationship between market potential and wages of manufacturing workers in the states of Mexico, using a standard model of New Economic Geography. The evaluation is considered an important aspect in developing countries, such as the distinction between formal and informal workers. The estimates show that, in general, the elasticity of market potential on wages is 0.082, which is robust to different measures related to the theories of agglomeration and endogeneity problems and spatial autocorrelation. It is also found that wages of informal workers are less sensitive to changes in market potential compared to the wages of formal employees and benefit from externalities generated by the presence of foreign firms. A simulation suggests that up to 10.7% of the wage gap between workers in states bordering North America and located in southern Mexico can be attributed to economic geography; this effect is smaller for informal workers and for the case of formal doubles.
    Keywords: Wage inequality , agglomeration economies, new geography economic, formal sector and informal sector.
    JEL: J31 O17 R12
    Date: 2015–04–16

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